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  • GBP/USD consolidates rally to three-month highs of 1.3440
  • Brexit deal, UK vaccine rollout likely this weekend.
  • US stimulus talks down the dollar, eyes on ADP jobs.

GBP/USD looks to extend its bullish consolidative mode above 1.3400 into European trading, having hit three-month highs at 1.3440 amid renewed Brexit optimism and broad-based US dollar weakness.

The underlying narrative remains the same this Wednesday, with hopes for a Brexit deal and coronavirus vaccine distribution in the UK this weekend keeping the GBP bulls underpinned.

The pound jumped a big 70-pips against the greenback to the highest levels since September in the US last session after the Times Radio reported that “the UK-EU trade deal talks have, at long last, entered the mythical tunnel. Hopes (on both sides) of a deal by the end of this week.”

European Commission President Ursula von der Leyen also said that the trade talks between the UK and European Union (EU) are “so tricky and so difficult” but there could be a positive outcome in the next few days,” per Bloomberg.

Additionally, upbeat UK Final Manufacturing PMI for November combined with the broad US dollar slump bolstered the upside in the cable. The greenback tumbled to fresh two-and-a-half-year highs against its major rivals amid a renewal of the US fiscal stimulus talks, which sent Wall Street indices to fresh record highs.

Next of relevance for the major remains the incoming Brexit updates and stimulus news while the US ADP jobs data will be also closely eyed.

GBP/USD technical levels